Dryson Company uses a job costing system. The work in process inventory on December 31 consisted of Job No. 175 with a balance of $61,500. Job No. 175 has been charged with manufacturing overhead costs of $18,000. Marion allocates manufacturing overhead costs at a rate of 60% of direct labour cost. What was the amount of direct materials charged to Job No. 175?

Question

Quizplus · Accepted Answer

To calculate the amount of direct materials charged to Job No. 175, we need to have information about direct labor cost. As the manufacturing overhead costs are allocated at a rate of 60% of direct labour cost, we can use this information to find the direct labor cost as follows:

Manufacturing overhead costs = 60% × Direct labor cost
$18,000 = 0.6DL
DL = $30,000

Now, to calculate the amount of direct materials charged to Job No. 175, we can use the following formula:

Total manufacturing costs = Direct materials + Direct labor + Manufacturing overhead
$79,500 = DM + $30,000 + $18,000
DM = $31,500 - $30,000
DM = $13,500

Therefore, the amount of direct materials charged to Job No. 175 is $13,500. Option A is the correct answer.

Dryson Company Uses a Job Costing System